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My question is for Starbucks Corporation Financial Analysis (SBUX) Using historical financial statements (income statements and balance sheets) for the firm including 2019 September report,

My question is for Starbucks Corporation Financial Analysis (SBUX)

Using historical financial statements (income statements and balance sheets) for the firm including 2019 September report, analyze the financial performance and changes to the firm over a ten-year time period using an end-point analysis framework similar to that used in analysis of example I will provide below. You should calculate the same ratios and financial measures as the example.

Example:

  1. An eye-ball assessment of the changes in financial statements between 2009and 2019e.g., overall growth in assets, revenues, equity, debt, etc.
  2. Analysis of the Common-size statementsi.e., what changed and why. That is, describe the changes in these statements and analyze the cause of the changes. Include: a) mix of assets, b) split between current assets and fixed assets, c) mix of debt, d) split between current liabilities and LT liabilities, capital structure (i.e., debt and equity), e) profitability at all levels, f) changes in expenses, etc. This section must include evidence of research indicating what events had substantive effects on Starbuckss financial profile during the 10 year period. In other words, profitability may have increased due to introduction of new product lines, leverage may have increased due to the issuance of bonds, and assets may have increased due to acquisitions. These are offered as examples, and your research should indicate what occurred and how it affected Starbucks from a financial perspective.
  3. Analysis of the ratios by categoryinclude in this an explanation of the cause of the changee.g., liquidity increased due to the increase in CAs and decrease in CLs. In addition to discussing each of the individual ratios, this section must include an overall conclusion regarding the direction of the four major categories of ratios. In other words, you must draw conclusions regarding the overall trends in 1) liquidity, 2) efficiency, profitability, and 4) leverage over the 10 year period. You must also provide industry averages where available so that you can compare Starbuckss ratios to those of its industry competitors.
  4. Analysis of the DuPont equation and discussion of the underlying reasons for the changes in ROI (ROA) and ROE.
  5. Analysis of working capital and discussion of the implication of a positive or negative WC level. Is Starbuckss WC policy conservative, moderate, aggressive? Why?
  6. Analysis of the Cash Conversion Cycle and discussion of its implications.
  7. Summary and conclusion concerning the major changes in Starbuckss financial situation.

Next, you will identify the major changes in the firms financial performance over this time period. Include an analysis of: 1) overall changes/growth in the firms revenues, assets, and liabilities; 2) common-size statements; 3) ratio analysis; and 4) analysis using the DuPont model.

You will be required to provide the conclusions regarding which way the major ratio categories are trending. An acceptable conclusion might be, for example: profitability has increased over the last five years as evidenced by increasing net margin and gross margin ratios. This is the result of a decrease in cost of goods sold, higher margins because of increased market share, etc. You should also research the notes to your companys 10K to determine the probable causes of these changes (Leverage increased because the company issued $50M in bonds to pay for a plant expansion.).

Part III: Working Capital Analysis

Using the same financial statements from your Financial Analysis (Part II), provide an analysis of the firms working capital policy and changes to this policy over a ten-year period. Your working capital analysis should include the following: 1) overall level and change in WC over the time period and the factors that caused these changes; 2) calculation of the Cash Conversion Cycle for the beginning and ending period and a discussion of causal factors and implication of these changes; 3) overall assessment of the firms working capital policy (i.e., is it conservative, moderate, or aggressive?). Compare your results to the firms industry averages.

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